Total Spirits volume, in the three months to November 2023, decreased by -23% compared to the same period in 2022. Across all other categories combined, volume sales declined -6.5% in the same comparison period, revealing the severity of the Spirits category fall.
CGA by NIQ’s leading-edge combination of volumetric data and consumer insights reveal the ‘whys’ behind this decline, giving suppliers and drinks brands a deeper understanding and equipping them to drive optimal strategies going forward.
Factors such as the weather, VAT increases from 9% to 13.5% in September, and reduction in overall consumer spend continue to impact consumer visits to the trade. As a result, the Spirits category has been in decline since June 2023, for many and varied reasons.
Spirits strongholds are being replaced by Beer-led venues due to outlet churn. The net impact of closures and new openings in ROI has resulted in the Spirits market reducing by 202 outlets. This shift in the hospitality landscape is accompanied by an increase in live sport occasions and the volume of consumers going out to watch live sports, with events such as the Rugby World Cup driving footfall.
These popular sporting occasions tend to favour Long Alcoholic Drinks (LAD), with activations heavily weighted towards the category. But that does not mean a lack of opportunity for Spirits during these occasions. The Six Nations Rugby is a prime example. This tournament attracts a more gender-balanced consumer group, over-indexing for drinking Gin during sporting events versus average consumers.
In contrast, high tempo is losing share of visits by -3pp, while special occasions and lower tempo visits are gaining. High tempo visits have traditionally been a heartland for Spirits. Consequently, a reduction in high tempo visits has stunted the category rate of sale. On the other hand, long mixed drinks represent the chance to extend the relevance of Spirits during more relaxed occasions and dayparts.
Furthermore, the key 18–34-year-old demographic is reducing Spirit consumption 7pp ahead of average. This health-conscious consumer group is more likely to moderate their alcohol intake, reducing their penetration of the Spirits category and driving them towards no/low alcohol beers and soft drinks. However, longer no/low alcohol Spirit drinks like spritzes are growing in popularity, and can be effective for engaging consumers looking for no/low options.
On top of everything else, cost of living concerns continue to impact consumer engagement with the On Premise, causing a third (35%) of consumers to drink less Spirits. There is a general perception that longer serves are better value for money, hence the surge in the LAD category. However, consumers value quality ingredients in their drinks. For this reason, awareness, positioning and visibility are key to ensuring spirits serves feel worth the cost.
Sian Brennan, client director – Ireland said: “The trend away from Spirits can be attributed to specific factors. This is why understanding what drives consumer behaviours is key to forming the most effective strategy for campaigns and investment. With the right approach to positioning Spirits and engaging consumers, brands and suppliers are in the best position to overcome the current challenges and drive future successes.”
Sian Brennan, client director – Ireland said: “The trend away from Spirits can be attributed to specific factors. This is why understanding what drives consumer behaviours is key to forming the most effective strategy for campaigns and investment. With the right approach to positioning Spirits and engaging consumers, brands and suppliers are in the best position to overcome the current challenges and drive future successes.”
On Premise measurement, paired with CGA’s consumer research suite provides many insights into consumers’ engagement and purchasing decisions in all On Premise channels, plus an expert analysis of categories, occasions and much more. To learn more about CGA’s On Premise solutions and explore opportunities for tailored analysis, email Sian Brennan via Sian.Brennan@nielseniq.com.
As seen in Hospitality Ireland – Spring 2024
